Publication:
Fiscal Challenges in Small States: Weathering Storms, Rebuilding Resilience

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dc.contributor.authorHill, Samuel
dc.contributor.authorKhadan, Jeetendra
dc.date.accessioned2024-09-23T15:41:21Z
dc.date.available2024-09-23T15:41:21Z
dc.date.issued2024-09-23
dc.description.abstractThe COVID-19 pandemic and the global shocks that followed have worsened fiscal and debt positions in small states, intensifying their already substantial fiscal challenges—especially the need to manage more frequent climate change–related natural disasters. Forty percent of the 35 emerging market and developing economies (EMDEs) that are small states are at high risk of debt distress or already in it, roughly twice the share for other EMDEs. Larger fiscal deficits since the pandemic reflect increased spending to support households and firms, and weaker revenues. To improve their fiscal sustainability and resilience to future shocks, small states need to strike a balance between maintaining adequate fiscal buffers and increasing investments in human capital and climate change–resilient infrastructure. Comprehensive fiscal reforms are essential. First, small states’ revenues, which are highly volatile and dependent on sometimes unreliable sources, should be drawn from a more stable and secure tax base. Second, spending efficiency needs to be improved, especially on transfers to public enterprises, subsidies, and the public wage bill. Third, these changes should be complemented by reforms to fiscal frameworks, including better utilization of fiscal rules and sovereign wealth funds. Finally, to help these countries stay on sustainable fiscal paths, well-coordinated and targeted global policies are also needed. Policies supported by the global community can help to improve fiscal policy management, provide technical assistance, address debt challenges, and bolster funding for small states to invest in climate change resilience and adaptation, and other priority areas.en
dc.identifierhttp://documents.worldbank.org/curated/en/099434409172423992/IDU1b75b641e17953141a9198c31f2c39b25d6f3
dc.identifier.doi10.1596/1813-9450-10913
dc.identifier.urihttps://hdl.handle.net/10986/42184
dc.languageEnglish
dc.language.isoen_US
dc.publisherWashington, DC: World Bank
dc.relation.ispartofseriesPolicy Research Working Paper; 10913
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttps://creativecommons.org/licenses/by/3.0/igo/
dc.subjectDEBT DISTRESS
dc.subjectFISCAL POLICY
dc.subjectGLOBAL ECONOMIC SHOCKS
dc.subjectNATURAL DISASTERS
dc.subjectSMALL STATES
dc.subjectINTERNAL LENDING AND DEBT PROBLEMS
dc.subjectBUDGET
dc.subjectDEFICIT
dc.subjectDECENT WORK AND ECONOMIC GROWTH
dc.subjectSDG 8
dc.titleFiscal Challenges in Small Statesen
dc.title.subtitleWeathering Storms, Rebuilding Resilienceen
dc.typeWorking Paper
dspace.entity.typePublication
okr.crossref.titleFiscal Challenges in Small States: Weathering Storms, Rebuilding Resilience
okr.date.disclosure2024-09-23
okr.date.lastmodified2024-09-17T00:00:00Zen
okr.doctypePolicy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/099434409172423992/IDU1b75b641e17953141a9198c31f2c39b25d6f3
okr.guid099434409172423992
okr.identifier.docmidIDU-b75b641e-7953-41a9-98c3-f2c39b25d6f3
okr.identifier.doi10.1596/1813-9450-10913
okr.identifier.doihttps://doi.org/10.1596/1813-9450-10913
okr.identifier.externaldocumentum34392182
okr.identifier.internaldocumentum34392182
okr.identifier.reportWPS10913
okr.import.id5325
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/099434409172423992/pdf/IDU1b75b641e17953141a9198c31f2c39b25d6f3.pdfen
okr.region.geographicalWorld
okr.topicFinance and Financial Sector Development::Debt Markets
okr.topicInternational Economics and Trade::Foreign Direct Investment
okr.topicMacroeconomics and Economic Growth::Fiscal & Monetary Policy
okr.unitProspects Group (DECPG)
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